Some economists contend that a monopolistic competitor tends to produce too __________ output, charges a price that is too __________ and __________ its present plant size.
A)little; low; underutilizes
B)little; high; underutilizes
C)much; low; overutilizes
D)much; high; overutilizes
E)much; low; underutilizes

Question

Quizplus · Accepted Answer

Monopolistic competitors often produce less than the socially optimal output level, charge a price higher than marginal cost, and underutilize their plant capacity due to the lack of perfect competition and the desire to maximize profits.

Some Economists Contend That a Monopolistic Competitor Tends to Produce